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TMI Blog2007 (5) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... y upto 26-4-99. As per the conditions incorporated in the notification an assessee availing the benefit there under could not opt out of the facility in the remaining part of the financial year, for availing the benefit of the Notification No. 8/99-C.E. dated 28-2-99. It was alleged that the appellant had filed a declaration under Rule 173B with effect from 1-4-1999 by their letter dated 3-4-1999 stating that they had opted for the exemption under the Notification No. 9/99 upto 26-7-1999. The clearances were made at a concessional rate of 60% of the normal rate of duty with a facility of availing Modvat Credit under Rule 57A. During the period from 1-4-1999 to 26-4-1999, the appellant effected clearances of its product of the value of Rs. 5,01,519/- and paid duty amount of Rs. 9,410/- from its personal ledger account and Rs. 38,737/- from RG-23A Part-II account, that is, by utilizing Modvat credit. How ever, thereafter the appellant claimed exemption under the Notification No. 8/99 dated 2-8-1999 and filed a declaration und Rule 173B with effect from 27-4- 1999, claiming full exemption for first aggregate clearance of Rs. 50,00,000/- under that notification. According to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the total duty demand of Rs. 3,29,078/- was upheld. 5. Before the Commissioner (Appeals), it was contended that the Notification Nos. 8/99 and 9/99 were misinterpreted by the adjudicating authority and that no option under Notification No. 9/99 was exercised by the declaration under Rule 173B, which was filed by the appellant. The Appellate Commissioner found that the appellant had declared under Rule 173B that it was availing the benefit of the Notification No. 9/99 with effect from 1-4-1999 and had actually made clearances at concessional rate of duty under that notification and also availed Modvat credit facility during the period from 1-4-1999 to 26-2-1999. It was, therefore, held that it was crystal clear that the appellant had exercised its option under para 2(i) of that notification. Later on, the appellant claimed exemption under Notification No. 8/99 and filed the declaration again under Rule 173B with effect from 27-4-1999. Since as per the terms of the Notification No. 9/99, it was not open to the appellant to switch over to the Notification No. 8/99 with effect from 27-4-1999 for the remaining part of the financial year, it was held that once the appellant opted f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph of the judgment that no declaration under Notification No. 38/97 was filed by that appellant and that the Modvat declaration under Rule 57G could not be substituted for the requirement of the Notification No. 38/97 (which was similar to Notification No. 9/99). The Tribunal upheld disallowance of Modvat credit, but set aside the penalty taking into consideration the facts and circumstances of that case. (b) The decision of Hon'ble the Supreme Court in Commissioner of Central Excise, Delhi v. Maruti Udyog Ltd., reported in 2002 (141) E.L.T. 3 (S.C.), was cited for the proposition that when cum-duty price is charged, then in arriving at the excisable value of the goods the element of duty which is payable has to be excluded. In that case the Hon'ble the Supreme Court had come to the conclusion that the price at which the waste was sold should be considered to be cum duty price and the assessable value should be determined after deducting the element of excise duty. The decision was rendered in the context of pre-amended provisions of Section 4 whereunder the duty of excise was chargeable with reference to the value, which was deemed to be the price at which such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Commissioner. He submitted that though the papers of declaration were to be filed in the office of the Superintendent, they were meant for consideration by the proper officer who also had an authority to extend time for filing such declaration. He further argued that the appellant cannot claim declaration of value on the ground of cum-duty price and also avail of Cenvat credit benefit. 8. The short issue under controversy is whether the appellant had exercised option in writing to the Assistant Commissioner, as contemplated by the Notification No. 9/99 so as to disentitle it from withdrawing the option during the remaining part of the financial year. 9. There is no dispute over the fact that the appellant had filed a declaration under Rule 173B, in which the fact about the appellant's availing of the benefit of the Notification No. 9/99 was clearly mentioned. Rule 173B required every assessee to file with the Superintendent concerned a declaration in quadruplicate giving the particulars enumerated thereunder and obtain an acknowledgement of such declaration. Such declaration was required to be filed within the period prescribed or such extended period as the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Notification No. 9/99, there was no need for it to make such declaration under Rule 173B. The condition contained in para 2 of the Notification No. 9/99 may be reproduced hereunder for ready reference :- "2. The exemption contained in this notification shall apply only subject to the following conditions, namely (i) a manufacturer who intends to avail the exemption under this notification shall exercise his option in writing for availing the exemption under this notification before effecting the first clearances of specified goods and such option shall be effective from the date of exercise of the option which shall not be withdrawn during the remaining part of the financial year. (ii) While exercising the option under condition (i), the manufacturer shall inform in writing to the jurisdictional Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of specified goods produced; (d) date from which option under this notification has been exercised; (e) aggregate value of clearances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification No. 9/99, but it actually worked under the notification to get the benefit of the option by clearing the goods at a reduce rate of duty. The authorities below were, therefore, fully justified in holding that having exercised this option, it was not open for the appellant to withdraw the same and switch over to the benefits of the Notification No. 8/99, which contemplated clearances without payment of duty upto the aggregate value mentioned thereunder with liberty to withdraw during the remaining part of the financial year only in favour of exercise of option with respect to Notification No. 9/99 which facility was stoutly denied in paragraph 2(i) of the Notification No. 9/99 which expressly laid down that the option thereunder shall not be withdrawn during the part of the financial year. The trade notice by the Mumbai Commissionerate requiring a separate intimation to the Assistant Commissioner over and above the declaration under Rule 173B may have been issued for the sake of convenience, but it will not reduce the efficacy of such option exercised in the declaration in writing made under Rule 173B for consideration by the proper officer who was the Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Writing by the Superintendent on 14-6-1999 clarifying the situation and directing the appellant not to avail the facility under the Notification No. 8/99 from 27-4-1999, as was tried to be done. The appellant, however, ignored the direction and switched over to Notification No. 8/99, which could not have been done in view of its having opted for the benefit under the Notification No. 9/99, under which it actually worked upto 26-4-1999. Therefore, the goods were removed without payment of the reduced rate of duty contemplated by Notification No. 9/99. For, violation of the directions of the proper officer, penalty prescribed under Rule 9(2) may extend to Rs. 2000/-. However, even after the directions were given on 14-6-1999, the appellant committed breach of the rules requiring duty to be paid at the time of removal, of the goods at the reduced rate. Therefore, the provisions of Rule 173Q(1)(a) will apply so as to merit penalty. Having regard to the facts and circumstances of the case, penalty of Rs. 2,50,000/- appears to be harsh and it is, therefore, reduced to Rs. 5000/-, which was the minimum prescribed in Rule 173Q. In view of this modification in the impugned order, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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